- Prepare and file Form 470 and RFP (if necessary) and make RFP available to potential bidders
- Develop bid evaluation matrix
- Wait 28 days
- Respond to service provider requests for information
- Select service provider using evaluation matrix
- Negotiate contract (if necessary)
- Sign contract (if necessary)
- File Form 471
October 23, 2012
E-Rate Competitive Bidding Procedure
Competitive bidding procedure for E-Rate:
October 4, 2012
Kan-Ed Transition Information
The following are unofficial considerations, tips and suggestions as you transition circuits from Kan-Ed 2012-13, relative to the E-rate, RFP and contracts process, and are based on years of experience!
The following are general considerations/tips/suggestions for navigating the process of contracts, and RFPs related to E-rate services:
Include product or service upgrades in contract
The SLD has very strict rules regarding upgrading service or products. If your original Form 470 request for services AND your contract include language such as, “X service or faster” or “Y component or upgrade”, making such changes in the middle of a contract is much easier. Explicitly state that service upgrades will be considered a minor contract modification and permitted under the parties’ agreement.
Non-E-rate Funding Out Clauses
If you cannot afford to pay 100% of your contract without E-rate discounts, or if you do not want the service unless you receive E-rate discounts, then you should be certain to include an “out clause.” Such a clause would include language stating that if you do not receive the full amount of requested E-rate funding, the applicant has the discretion to nullify and cancel the contract. You may wish to include a “Board Approval” contingency also. Not all district contracts are signed by Board Members and this may help if the District has been funded through E-rate, but has decided not to move in that direction. Keep in mind this means you should not start your service before you receive your Funding Commitment Decisions Letter.
Red Light Rule
Applicants should require vendors to certify in their bid response that the vendor is not the subject of the FCC’s Red Light Rule, which means that they do not have any obligations outstanding with the FCC, USAC, or any other federal agency.
Standard Terms and Conditions
Often, applicants will accept a vendor’s bid response, only to find out when they begin to negotiate the actual contract that the vendor’s standard Terms and Conditions are unacceptable. Require that vendors submit their proposed contract with their bid response, and make them certify that they understand the final contract will be negotiated and that the applicant is not expected to agree to the vendor’s standard terms and conditions. In order to have the best chance to reach a mutually-agreeable contract, the contract negotiation process should begin as early as possible in the process. Applicants that are forced to negotiate contract terms at the end of the E-rate window typically do not fair well because the E-rate clock is ticking to get the contract signed.
Contract Extensions
The E-rate program allows for contract extensions as long as such terms were included in the original contract AND on the 470/RFP. Further, the first possible date of the end of the contract, not including extensions, must be included on the original Form 471, not the end of the contract that includes extensions. For example, if a school signs a 2 year contract, ending 2012, with a 1 year renewal option, the expiration date should be 2012, not 2013. If you want to have the ability and option to voluntarily renew the contract you are entering into, make sure that you check the appropriate boxes in Item 7 of Form 470, mention the possibility of voluntary contract extensions in your RFP, AND have the extension language in your contract. Otherwise, you will have to rebid the contract instead of extending it.
Specificity of Contract Language
Be sure to include specific language in your contract regarding the quality of work performed, and the schedule of installation or service. Also, be sure to include what the penalties will be for noncompliance with the installation guarantee date or service levels or quality.
Specify Discounts or Reimbursements
Applicants are permitted the final choice whether to receive discounts on bills or whether to pay their bills in full and submit the Form 472 BEAR to the SLD for reimbursement. Wherever possible, this choice should be established in your contract and 470/RFP to avoid all confusion and to provide the service provider with as much notice as possible. Also, some service providers continue to refuse to provide discounted bills. So if this is a non-starter for an applicant, their 470 and/or RFP should make it clear that they will not consider bids from vendors who are not able to discount bills.
Payment Schedule
- For the remainder of this year: the E-rate cycle will not allow adding additional funding for this school year. House Bill 2390 states that Kan-Ed will provide some funding reimbursement to bridge members through the end of June 2013. The details of this subsidy have not yet been determined. This information will be forthcoming from Kan-Ed.
- Establishing a temporary/short term circuit for this year—please follow state bidding requirements—and if you INTEND to E-rate this new contract beginning 07/01/2013 you must follow bidding instruction in Item 3 below, and you can include terms within the contract to allow for contract extension options provided you follow the process for posting a 470/28 day waiting period (See below). It is also wise to include an option to cancel in the event that you do not receive E-Rate funding approval.
- IF you plan to secure E-rate for the circuit beginning July 1, 2013-June 30, 2014, DO NOT sign a multi-year contract before completing the form 470 and observing the required 28 day waiting period (sign on day 29!). (Note: IF you do—the contract date will precede the 470’s required 28 day waiting period and funding will be denied)
- Multi-year contracts should end on June 30 of any given year for recurring services.
- If you are applying for both Priority 1 (telecommunication circuits/internet access) and Priority 2 services (internal connections/wiring services )—it is in the applicant’s best interest to apply separately for the internal connections services as Priority 1 services are funded first.
- If you are applying for Internal Connections/wiring—it may be beneficial to apply separately for each school. Consider the individual school’s discount rate and determine the best approach.
The following are general considerations/tips/suggestions for navigating the process of contracts, and RFPs related to E-rate services:
Include product or service upgrades in contract
The SLD has very strict rules regarding upgrading service or products. If your original Form 470 request for services AND your contract include language such as, “X service or faster” or “Y component or upgrade”, making such changes in the middle of a contract is much easier. Explicitly state that service upgrades will be considered a minor contract modification and permitted under the parties’ agreement.
Non-E-rate Funding Out Clauses
If you cannot afford to pay 100% of your contract without E-rate discounts, or if you do not want the service unless you receive E-rate discounts, then you should be certain to include an “out clause.” Such a clause would include language stating that if you do not receive the full amount of requested E-rate funding, the applicant has the discretion to nullify and cancel the contract. You may wish to include a “Board Approval” contingency also. Not all district contracts are signed by Board Members and this may help if the District has been funded through E-rate, but has decided not to move in that direction. Keep in mind this means you should not start your service before you receive your Funding Commitment Decisions Letter.
Red Light Rule
Applicants should require vendors to certify in their bid response that the vendor is not the subject of the FCC’s Red Light Rule, which means that they do not have any obligations outstanding with the FCC, USAC, or any other federal agency.
Standard Terms and Conditions
Often, applicants will accept a vendor’s bid response, only to find out when they begin to negotiate the actual contract that the vendor’s standard Terms and Conditions are unacceptable. Require that vendors submit their proposed contract with their bid response, and make them certify that they understand the final contract will be negotiated and that the applicant is not expected to agree to the vendor’s standard terms and conditions. In order to have the best chance to reach a mutually-agreeable contract, the contract negotiation process should begin as early as possible in the process. Applicants that are forced to negotiate contract terms at the end of the E-rate window typically do not fair well because the E-rate clock is ticking to get the contract signed.
Contract Extensions
The E-rate program allows for contract extensions as long as such terms were included in the original contract AND on the 470/RFP. Further, the first possible date of the end of the contract, not including extensions, must be included on the original Form 471, not the end of the contract that includes extensions. For example, if a school signs a 2 year contract, ending 2012, with a 1 year renewal option, the expiration date should be 2012, not 2013. If you want to have the ability and option to voluntarily renew the contract you are entering into, make sure that you check the appropriate boxes in Item 7 of Form 470, mention the possibility of voluntary contract extensions in your RFP, AND have the extension language in your contract. Otherwise, you will have to rebid the contract instead of extending it.
Specificity of Contract Language
Be sure to include specific language in your contract regarding the quality of work performed, and the schedule of installation or service. Also, be sure to include what the penalties will be for noncompliance with the installation guarantee date or service levels or quality.
Specify Discounts or Reimbursements
Applicants are permitted the final choice whether to receive discounts on bills or whether to pay their bills in full and submit the Form 472 BEAR to the SLD for reimbursement. Wherever possible, this choice should be established in your contract and 470/RFP to avoid all confusion and to provide the service provider with as much notice as possible. Also, some service providers continue to refuse to provide discounted bills. So if this is a non-starter for an applicant, their 470 and/or RFP should make it clear that they will not consider bids from vendors who are not able to discount bills.
Payment Schedule
If you have terms and conditions under which you will make scheduled payments, such arrangements should be included in your contract. For example, if your vendor wishes to be paid on a quarterly basis or if your vendor would like to receive upfront payments for work such as installation of a new network.
Don’t sign contract before end of 28 days
Pay careful attention to not sign a contract or select a service provider before the end of the 28 day 470 waiting period. The contract and the 471 application (Item 18 Contract Award Date)must be signed on or after the Allowable Contract Date (Item 17) which is basically the 29thcalendar day after the corresponding 470 is posted on the SLD’s Web site.
Contract Expiration Dates
Recurring Services: Every attempt should be made to make sure that contracts do not expire before the end of the upcoming year (June 30, 201x). Funding is only provided for services received prior to the Contract Expiration Date. In addition, many schools and libraries have taken advantage of the multi-year contract option which allows them exemption from the 470 posting for the remaining years of the contract. Even with multi-year contracts, be certain they end on June 30.
Non-Recurring Services
Don’t sign contract before end of 28 days
Pay careful attention to not sign a contract or select a service provider before the end of the 28 day 470 waiting period. The contract and the 471 application (Item 18 Contract Award Date)must be signed on or after the Allowable Contract Date (Item 17) which is basically the 29thcalendar day after the corresponding 470 is posted on the SLD’s Web site.
Contract Expiration Dates
Recurring Services: Every attempt should be made to make sure that contracts do not expire before the end of the upcoming year (June 30, 201x). Funding is only provided for services received prior to the Contract Expiration Date. In addition, many schools and libraries have taken advantage of the multi-year contract option which allows them exemption from the 470 posting for the remaining years of the contract. Even with multi-year contracts, be certain they end on June 30.
Non-Recurring Services
Have your contract end September 30 instead of June 30. While the funding year ends June 30, the FCC has ruled that schools and libraries have until Sept. 30 to complete the installation of nonrecurring services. Indicating the Sept. 30 expiration date will alleviate you from having to file a Form 500 to change your date.
Separate Priority 1 and Priority 2 services
If you are applying for both circuits/internet access (considered Priority 1 service) and internal connections/wiring services (considered Priority 2 service) for it—it is in the applicant’s best interest to apply separately for the internal connections services as Priority 1 services are funded first.
Sign separate internal connections/wiring contracts for highest discount schools
As mentioned in the previous item, the program has telecommunications services and Internet access (classified as Priority 1 service) and thus they are funded first. Any remaining money will go toward funding internal connections (Priority 2 service) in order of the highest discount applicant first.
Therefore it may be in the applicant’s best interest to apply separately for the highest discount schools. For example, if a high school’s discount is 80% and the elementary school’s discount is 90%, it may benefit the school to apply for the internal connections services separately than the high school because that site has a higher discount, and thus may stand a greater chance of being funded.
Bidding According to State Law
Public education entities: Be certain that if items requested on the 470 are required to be bid under state law, that you post these items for bidding advertisement at the same time. Competitively bidding on the SLD website does not exempt you from bidding at the local level according to the school code. If the 470 and RFP are not released on the same day, the SLD will permit this situation as long as these forms are publicly availably for 28 coterminous days. In other words, if you release your RFP, and then post your 470 five days later, the RFP must be open and available for bid responses until the end of the 470’s 28-day competitive bidding period. Further, be careful not to schedule any pre-bid meetings on the day or few days after the 470 has been posted in order to give the maximum number of vendors the chance to review your 470 and attend your pre-bid meeting. Lastly, it may seem obvious, but many applicants are denied funding because the contract date was prior to the 470’s 28-day competitive bidding period. Any contract/bid approval or award and the paperwork process of signing contracts should occur AFTER the 470’s 28 day competitive bidding period as well.
Kan-Ed: (785)296-0843
State E-rate Assistance: Melinda Stanley, KSDE mstanley@ksde.org 785.296.1204
KS E-rate Hotline: 1-866-372-8302
Service Center E-rate Experts/Contacts:
Separate Priority 1 and Priority 2 services
If you are applying for both circuits/internet access (considered Priority 1 service) and internal connections/wiring services (considered Priority 2 service) for it—it is in the applicant’s best interest to apply separately for the internal connections services as Priority 1 services are funded first.
Sign separate internal connections/wiring contracts for highest discount schools
As mentioned in the previous item, the program has telecommunications services and Internet access (classified as Priority 1 service) and thus they are funded first. Any remaining money will go toward funding internal connections (Priority 2 service) in order of the highest discount applicant first.
Therefore it may be in the applicant’s best interest to apply separately for the highest discount schools. For example, if a high school’s discount is 80% and the elementary school’s discount is 90%, it may benefit the school to apply for the internal connections services separately than the high school because that site has a higher discount, and thus may stand a greater chance of being funded.
Bidding According to State Law
Public education entities: Be certain that if items requested on the 470 are required to be bid under state law, that you post these items for bidding advertisement at the same time. Competitively bidding on the SLD website does not exempt you from bidding at the local level according to the school code. If the 470 and RFP are not released on the same day, the SLD will permit this situation as long as these forms are publicly availably for 28 coterminous days. In other words, if you release your RFP, and then post your 470 five days later, the RFP must be open and available for bid responses until the end of the 470’s 28-day competitive bidding period. Further, be careful not to schedule any pre-bid meetings on the day or few days after the 470 has been posted in order to give the maximum number of vendors the chance to review your 470 and attend your pre-bid meeting. Lastly, it may seem obvious, but many applicants are denied funding because the contract date was prior to the 470’s 28-day competitive bidding period. Any contract/bid approval or award and the paperwork process of signing contracts should occur AFTER the 470’s 28 day competitive bidding period as well.
Kan-Ed: (785)296-0843
State E-rate Assistance: Melinda Stanley, KSDE mstanley@ksde.org 785.296.1204
KS E-rate Hotline: 1-866-372-8302
Service Center E-rate Experts/Contacts:
- Tom Barnes, Southwest Plains Regional Service Center tom.barnes@swplains.org (620)675-8835
- Tamera Burke, Smoky Hill Education Service Center tburke@smokyhill.org (785)825-9185
- Denise Grasso or Brad Stefanoni, Greenbush: denise.grasso@greenbush.org or brad.stefanoni@greenbush.org; (620)724-6281
- Ron Henley, Essdack, ronh@essdack.org (620)663-9566
- Deb Steward, Smoky Hill Education Service Center dsteward@smokyhill.org (785)621-4414
If a district chooses to switch providers at this time, they can file a Form 470 NOW, waiting the appropriate 28 days, filing the Form 471 when the erate window opens there will be subsidy dollars to help defray the cost of districts through the transition period allocated by the legislature (but nobody knows how this will occur - the thought is that it will be an application process).
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